Kristalina Georgieva, Managing Director, IMF
Formerly Chief Executive, the World Bank
This article first appeared in the Financial Times special report on youth employment, 21st April 2017. Reprinted by permission
Shortly after graduating from university in Sofia, Bulgaria at the age of 23, I was hired as an assistant professor. It was everything I had hoped for – intellectually challenging with a predictable career path all the way through to retirement. Such were the certainties of the 1970s
I wish it was as easy for today’s 23-year olds. But, sadly, it is not.
One of the ironies of our times is that the world has never been wealthier – global GDP topped $75 trillion in 2016. Yet there has never been so much anxiety over the future of work. It is particularly tough for the under-25s; they are about four times as likely to be unemployed as their elders. As life expectancy rises, so does the need for people of my generation to keep working, which is a further block to younger job seekers.
With the nature of work changing continuously, job insecurity is now a fact of life. Artificial intelligence and automation are eliminating a range of blue and white-collar jobs, from trucking to banking, affecting people in both rich and poor countries.
Achieving the UN’s sustainable development goal of full and productive employment and decent work for all by 2030 will be a tall order. We need to create at least 600m more jobs before that deadline to keep up with new entrants joining the job market – and at least two-thirds of these jobs need to be in the developing world, where the youth population is growing fastest. If we fail, we will squander what ought to be a demographic dividend for developing countries.
Governments should help young people start their own enterprises and link small businesses and farmers to larger markets.
It is important to note that jobs not only provide income, they also help workers connect to the society around them. This is especially important for young people in poorer countries and in regions torn by conflict.
At the World Bank Group, we have invested in understanding country employment dynamics and how they affect youth. We know from our analysis that, to tackle youth unemployment, we have to create the right kinds of jobs in the right places, through investments that are both economically and socially profitable.
For example, while manufacturing and services were once routes out of poverty for millions of young workers, technological innovation is making those paths more difficult to take. Likewise, investment that is concentrated in capital-intensive industries that generate few jobs, like oil and gas, leaves workers trapped in temporary or informal labour.
In the parts of the world where youth unemployment is highest, agriculture is still the biggest employer. Two-thirds of Sub-Saharan African workers work in the agricultural sector, where productivity is low and earnings stagnant. They might improve their job prospects by moving to the city but without education and access to technology, they have little hope of advancement.
What can we do to help?
The starting point should be education. All children need to go to – and stay in – school. Research shows the ability to learn throughout life, to adapt and to work flexibly, will be vital – as will technical, social, and critical thinking skills. Education has to adapt to help people become life-long learners.
To enhance the employment prospects of the young – and meet the wants of the local market – we also need to improve the design of training programmes. In Argentina, the World Bank is helping the government strengthen and expand training for disadvantaged young adults. A programme we are supporting in Ivory Coast matches first-time workers to internship schemes that lead to permanent jobs with full benefits.
Second, governments need policies that encourage the private sector to generate more jobs. This includes investing in transport and digital infrastructure. We find that young companies are normally the most dynamic in creating good quality jobs, but they also need the most help to get going. Governments should help young people start their own enterprises and link small businesses and farmers to larger markets.
Third, because it will take time to bring all businesses into the formal sector, for the foreseeable future, many jobs for young people in developing countries will remain informal.
The challenge is to help informal workers and enterprises diversify and increase their productivity, and to connect them to marketing expertise in innovation to help their businesses grow. Universal social safety nets will also be critical so that benefits are not limited to workers in the formal sector.
There are clear steps we can take, but we have to work together – governments, the private sector, academia and civil society. As former UK prime minister, Gordon Brown’s 2016 Education Commission report on financing global education noted: “Economies will rise or fall depending more on their intellectual resources than their physical resources.”
Preparing for the jobs of the future depends on the actions we take today, so that the defining technological, economic and demographic trends of this century will create opportunity rather than entrench inequality.
A Short History of Youth Job Creation
From fathers teaching sons the techniques of warfare, farming or state-craft, to mediaeval guilds teaching apprentices their trades; from Roosevelt’s Depression-era Civilian Conservation Corps – building schools, bridges and woodland trails, to the Soviet Communist Party’s commitment to cradle-to-grave employment – youth job creation has long been a feature of local and national governance.
Following the end of the 2nd World War, some students founded AIESEC – to build international solidarity and create alternatives to military jobs which elders had, traditionally, relied on youth to fill. AIESEC, founded in 1948, was an early example of youth fostering leadership through creating exchanges, conferences and internships. Now one of the largest youth-led organisations in the world, with over 70,000 members, it has pioneered the concept of youth agency: youth pulling themselves up by their bootstraps and creating their own jobs and livelihoods. Though some youth still believe that the world, or society, owes them a living, youth job creation should always begin with youth taking control of their destiny.
In the short history of international development assistance, the idea of ending poverty through creating jobs is a relatively recent phenomenon. An early example was the setting up of the Prince’s Trust in the UK. When Prince Charles left the navy in 1976, he used his severance pay to fund small projects in deprived areas. This grew and, in the early 1980s, unemployment reached a 50-year high and riots broke out in Brixton, Birmingham and Liverpool. Charles visited the rioters and asked them why they didn’t get jobs. “No jobs round here,” they told him [ – correctly! Toxteth in Liverpool had one of the highest unemployment rates in the country.] “So why don’t you start a business – create your own job?” asked Charles. “No one would give us any money to do that,” they replied. And Charles thought a moment, then said: “I would.” And so started the Prince’s Trust Enterprise Programme which, since 1983, has started 80,000 mostly disadvantaged young people in business – several of whom have gone on to become millionaires, and captains of industry.
The model was franchised around the world in 1990 by the Prince’s International Business Leaders Forum IBLF which eventually spun it off as the independent Youth Business International. This now works in 50 countries and has helped tens of thousands of young people launch their own businesses. The Prince’s Trust pioneered the concept of business start-up mentors finding that, with a caring mentor, 70 to 80% of new businesses survived and prospered for at least three years. Without a mentor, that figure dropped to around 20%. It also devised ways for youth to access to capital for there is nothing more frustrating for young people than to do business plan creation training, create a viable business plan, and then find there is no way to access the funds needed to operationalise it.
If imitation is the sincerest form of flattery, the Prince’s Trust has been much flattered – especially by the Commonwealth. Many Commonwealth countries now have branches of Youth Business and/or Prince’s Trust International. The Commonwealth Secretariat has, since 1973, had an active Youth Programme, now almost exclusively focussed on youth enterprise and job creation. It has created 4 x Commonwealth Alliance of Young Entrepreneurs (CAYEs) – in the Caribbean & Canada, in Asia and in East & Southern Africa. These bring together young entrepreneurs, venture capitalists and inventors, enabling them to share ideas and build businesses together. Through its research, its awards programmes and its regular meetings of ministers and thought-leaders, the Commonwealth member states put into effect their belief that young people aged 15-29 are assets to a country’s development and should be empowered to realise their potential. (See page 92, and Commonwealth youth leaders’ essays, pages 98 to 106)
Around the turn of the millennium, youth job and enterprise creation entered the main stream of development thinking. Peace Child International developed the concept of ‘youth-led development’ – development delivered by young people, not just for young people. In 2003, Hand in Hand Co-Founder Percy Barnevik teamed up with Indian development specialist, Dr Kalpana Sankar, to devise the Hand in Hand job creation model. In the USA, Rick Little got a $64m grant from the Kellogg Foundation to start the International Youth Foundation (IYF) to replicate ‘initiatives that work’ in the youth field. IYF developed the immensely successful Entra 21 project – a unique partnership between government, the private sector, educators and youth themselves to match educational curricula to the needs of private sector employers. It has gone on to develop Passport to Success® (see page 71) – which addresses the problem that many young people face: they have the technical skills to do a job but lack the life skills to grow a management team and make a company successful company.
MBAs became the university course of choice for all young people trying to get into business. Hundreds of training establishments with names like the ‘Gazelle’ or ‘Peter Jones’ Academies’ appeared offering short courses in business start-ups. Dragon’s Den became one of the most popular programmes on British television enabling entrepreneurs to pitch their business ideas to people like Doug Richard, founder of Cambridge Angels and School for Start-ups. The UK government got in on the act, providing loan guarantees to the Start-up Loans Company, which they hired another ‘Dragon,’ James Caan, to manage. Working through regional delivery partners, they have, in six years, loaned £360m to over 50,000 start-up companies.
Away from the UK, US real estate magnate, Ron Bruder, started Education for Employment (EFE) in 2002 following the 9/11 attacks – to help young people in the Middle East and North Africa (MENA) region channel their energy and talents into job and enterprise creation. The MENA region has a huge youth population and one of the highest youth unemployment rates in the world. The Arab Spring was largely driven by unemployed youth: EFE, Jordan’s INJAZ, Qatar’s Silatech and many other initiatives are all working hard to create jobs in the MENA for the youth of the region.
In 2008/09, as parts of Europe saw their youth unemployment rates soar to over 50%, the lowest youth unemployment rates in the world were to be found in Germany, Austria and Switzerland. These were, in part, due to the Dual System of education practised in all three countries: students get the chance to do work experience and apprenticeships, so that they can learn skills, develop good work habits and forge a relationship with a company or local employer while still at school. The UK Studio Schools network offers similar courses. Scandinavia, they lowered youth unemployment through job guarantee schemes – which guarantee students a job, or a place on a training course, within months of leaving school. A similar scheme has now been developed by the European Commission and introduced across all EU Member States.
Outside Europe, in Low Income Countries, such schemes are generally too expensive for governments to consider. Some – like South Africa – deliver jobs through Expanded Public Works schemes which engage youth in infrastructure projects and teach them good work habits and marketable skills at the same time. A version of the Dual System has been developed by Fundacion Paraguaya and Teach a Man to Fish – with the School Enterprise and Self-financing School initiatives: youth in schools generate income through starting and running small businesses, the income from which pays their teachers and the school building rent.
Several donor and private sector initiatives now work to ease youth access to finance – through loan guarantees, stock or equipment leasing arrangements, mobile phone micro-credit, or, like www.Kiva.org and www.lendwithcare.org, through online loan schemes.In 2011, the World Bank’s Global Partnership for Youth Investment found that “less than one quarter of one per cent of loan portfolios of finance providers are directed to those under the age of 30…” That figure has doubtless improved, but in a recent PCI survey, 91% of youth reported that access to capital is the biggest obstacle for them trying to start a new enterprise or move into productive self-employment. In the history of youth job creation, access to finance is a challenge that never goes away.
Over-arching all these initiatives is the UN system’s work on youth job creation. From UNESCO’s Education for All and youth training programmes, to UNEP’s Green Economy initiative, almost every UN agency is doing something to help youth into what the ILO calls “decent work.” The ILO is the UN’s lead agency on youth employment, and its Global Employment Trends for Youth (GET Youth) publication (see page 56) updates, every two years, global youth employment statistics. GET Youth is an essential reference work for all in this field. The ILO also runs the Global Initiative for Decent Work – agreed by the heads of all UN Agencies in February 2016. Guy Ryder, ILO Director General, said, in launching the initiative: “In low-income countries, nine in ten young workers remain in informal employment which is sporadic, poorly paid and falls outside the protection of law. This initiative will make full use of the expertise of participating UN entities and focus on “green jobs” for youth, quality apprenticeships, digital skills and the building of “tech-hubs” to promote youth entrepreneurship and support young people facilitate transition from the informal to the formal economy.”
The other big beast in the international Youth Job Creation field is the World Bank’s Solutions for Youth Employment (S4YE) initiative – a coalition of private sector, government, and third sector thought leaders who work together to “link, leverage and learn” solutions to the global problem of youth unemployment. Founded in 2015, it has published several valuable reports and analyses. One of these, a Systematic review of 113 World Bank and IFC Youth Job Creation Projects, drew attention to the need for the Systems Approach we seek to promote in the Global campaign. The Report stated:
We find strong evidence that programmes that integrate multiple interventions are more likely to succeed because they are better able to respond to the different needs of beneficiaries.
- Entrepreneurship training combined with access to finances provide best impacts.
- A combination of complementary interventions, such as training with job search, placement assistance in partnership the private sector, personal monitoring and follow up of individual participants, has more positive effects than isolated interventions.
- In countries with a strong, formal jobs sector, programmes that smooth the transition from school to work with work-based skills development are the most effective.
- In rural low-income areas, where youth are active in agriculture and non-farm self-employment, stimulating rural agribusinesses markets is effective
- Temporary wage subsidies paid to employers to hire youth and teach them with higher-level skills has positive employment impact.
- Depending on design, and matching skills delivered to employer’s needs, skills training can improve youth’s employment prospects.
The report also pointed out interventions that are less effective:
- Employment services interventions appear to deliver the weakest outcomes.
- In labour-abundant, low-income countries with weak institutions e.g. in Sub-Saharan Africa and South Asia, interventions targeting formal employment may be regressive.
The report also lays out Key Policy Considerations which, like those identified in the Economist’s 2013 issue on ‘Generation Jobless’ (see page 46) are still highly relevant today:
- More than 50% of investments / interventions in our analysis are supply side measures but public investments must be based on a better understanding of the constraints to sustained and broad-based job creation on the demand side as well as greater employability skills on the supply side.
- We know policy- and system-levels interventions are critical to reach scale, but we don’t have enough evidence on how active labour market policy affects youth.
- No one-size fits all: constraints and opportunities vary by person and by place. More data is needed on spatial + gender-based gaps where targeted policies / programmes may be necessary
- Youth inclusion and participation is important: primary research on youth is key to understand their perspectives on their environment & the constraints they face.
The event which arguably made the greatest impact on the youth Job Creation field was the agreement, in September 2015, all 193 UN Member Governments to sign up to the 17 Sustainable Development Goals. For Goal 8, Target 5 promises, by 2030:
“… to achieve full and productive employment and decent work for all women and men, including for young people and people with disabilities….”
The World Bank calculates that this would generate up to $5 trillion growth in the Global economy. This is why the Parliamentary Network (PN) on the World Bank and IMF – under the leadership of its current chair, Jeremy Lefroy MP, UK and Vice-chair, Olfa Cherif, Tunisia – have sought to raise the profile of youth job creation amongst its parliamentary members. It has also sought to promote the policy solutions proposed by the World Bank and the many other governments and NGOs active in this field.
The PN has done this by publishing 4 x editions of a Youth Job Creation Policy Primer all of which are available at: www.youthjobcreation.org – as is this Booklet, along with links to all the organisations, and data-sets referred to. We thank the PN for its leadership and encourage its members to recognise that, in both the international arena, but more in their national arenas, solutions to youth employment usually start with the legislation, tax and procurement regimes that they manage.
The leadership of the PN has proved invaluable – and its success is demonstrated by the fact that Youth Job Creation is now high on the agenda of many governments, UN institutions, donors, investors and the private sector. But the crisis is far from resolved. Which is why we need a Global Campaign for Youth Employment.
The Economist Magazine – April 27th 2013
HELDER PEREIRA is a young man with no work and few prospects: a 21-year-old who failed to graduate from high school, he lost his job on a building site four months ago. With his savings about to run out, he has come to his local employment centre in the Paris suburb of Sevran to sign on for benefits and get help finding something to do. He’ll get the cash. Work is another matter. Youth unemployment in Sevran is over 40%.
A continent away in Athlone, a gritty Cape Town suburb, Nokhona, a young South African mother of two, lacks a “matric” or high-school qualification, and has been out of work since October 2010, when her contract as a cleaner in a coffee shop expired. She hopes for a job as a maid, and has sought help from DreamWorker, a charity that tries to place young jobseekers in work. A counsellor helps Nokhona brush up her interview skills. But the jobless rate among young black South Africans is probably around 55%.
The problem of youth unemployment has been getting worse for several years. But there are at last some reasons for hope. The world now has a real chance of introducing an education-and-training revolution worthy of the scale of the problem.
Governments are trying to address the mismatch between education and the labour market but closing the gap will require a change of attitude from business as well. Some companies are beginning to take more responsibility for investing in the young: IBM has sponsored a school in New York. McDonald’s has an ambitious new training scheme. India’s IT giant, Infosys, plans to train 45,000 new employees a year, including 14,000 at a time at its main campus in Mysore. Americana Group, a regional food and restaurant company with headquarters in Kuwait, allows trainees to spend up to half their time at work and the rest in college. Others are revamping their training programmes and using technology to help democratise education and training: programmes designed around computer games can give youngsters some virtual experience, and online courses can help apprentices combine on-the-job training with academic instruction. However, the fear that employees will be poached by other companies discourages many firms from investing in the young. There are ways of getting around this: for example, groups of employers can co-operate with colleges to design training courses.
“YOUNG people ought not to be idle. It is very bad for them,” said Margaret Thatcher in 1984. She was right: those who start their careers on the dole are more likely to have lower wages and more spells of joblessness later in life, because they lose out on the chance to acquire skills and self-confidence in their formative years.
Yet more young people are idle than ever. The number of young people without a job has risen by 30% since 2007 and disengaged young people cost economies. One estimate suggests that, in 2011, the economic loss from youth unemployment in Europe amounted to $153 billion – more than 1% of GDP.
Emerging economies, that have the largest and fastest-growing populations of young people, also have the worst-run labour markets. Almost half of the world’s young people live in South Asia, the Middle East and Africa. They also have the highest share of young people out of work or in the informal sector. The result is an “arc of unemployment”, from Southern Europe through North Africa and the Middle East to South Asia, where the rich world’s recession meets the poor world’s youthquake.
The anger of the young jobless burst onto the streets in the Middle East in the Arab Spring. Morocco, Egypt and other north African and Middle Eastern countries have among the worst rates in the emerging world. Violent crime, generally in decline in the rich world, is rising in Spain, Italy and Portugal—countries with startlingly high youth unemployment. Though they are at different stages of development, these countries all suffer disproportionately from employment’s main curses: low growth, clogged labour markets and a mismatch between education and work.
Skills Matching: Employers are awash with applications—but complain that they cannot find candidates with the right abilities. McKinsey reports that only 43% of the employers in the nine countries that it has studied in depth (America, Brazil, Britain, Germany, India, Mexico, Morocco, Saudi Arabia and Turkey) think that they can find enough skilled entry-level workers. Middle-sized firms (between 50 and 500 workers) have an average of 13 entry-level jobs empty.
Mismatch and training gaps may explain why over the past five years youth unemployment in flexible economies like America and Britain has risen more than in previous recessions and stayed high. Britain has one of the world’s most flexible labour markets but has more than twice as many young unemployed as Germany (11.5% of the labour force vs.3.9%). This is perhaps because Britain has a long-standing prejudice against practical education: in 2009 only about 8% of English employers trained apprentices compared with four times that number in Germany. 29% of British employers say work experience is “critical” but the share of British children who do it has been falling for the past 15 years. Only 7% of pupils say they had any mentoring from a local employer and only 19% had visited one. In France few high-school leavers have any real experience of work.
Another more subtle reason is the over-emphasis some governments make on University education: in North Africa, universities focus on preparing their students to fill civil-service jobs even as companies complain about the shortage of technical skills. There is also a glut of graduates: the unemployment rate in Morocco is five times higher for graduates as it is for people with only a primary education.
The most obvious way to tackle this problem is to reignite growth. Joblessness in southern Europe has surged as economies have shrunk. South Africa’s high jobless rate is stoked by the fact that it is now one of Africa’s slowest-growing economies. But reigniting growth is easier said than done in a world plagued by debt, and is anyway only a partial answer. The countries where the problem is worst (such as Spain and Egypt) suffered from high youth unemployment even when their economies were growing. This underlines the importance of three other solutions: reform labour markets, use technology and improve education. These are familiar prescriptions, but ones that need to be delivered with both a new vigour and a new twist.
- Deregulating labour markets is central to tackling youth unemployment: rigid labour markets in countries that let business cartels curb competition, place high taxes on labour, enforce high minimum wages or impose regulations that make it hard to fire people, are bad places for the young jobless. In India big factories and firms face around 200 state and federal laws governing work and pay. South Africa has notably strict laws on firing. North Africa and the Middle East suffer from a bloated and over-regulated public sector, heavy taxes on labour and high minimum wages. Alongside deregulation, incentivizing youth employment helps: Germany, which has the second-lowest level of youth unemployment in the rich world, pays a proportion of the wages of the long-term unemployed for the first two years. The Nordic countries provide young people with “personalised plans” to get them into employment or training. But these policies are too expensive to reproduce in southern Europe, with their millions of unemployed, let alone the emerging world. A cheaper approach is to reform labour-hungry bits of the economy—for example, by making it easier for small businesses to get licences and construction permits.
- Use Technology: Technology makes it easier to take work to people who live in work-deprived areas or who are shut out of the market by cartels. For example, Amazon’s Mechanical Turk, an internet marketplace, enables companies to hire workers to perform simple tasks such as identifying people in photographs. They can take part from anywhere.
- Improve Education: Across the OECD, people who left school at the earliest opportunity are twice as likely to be unemployed as university graduates. In many developing countries, those figures are reversed.
What matters is not just number of years of education people get, but its content. This means expanding the study of STEM subjects and closing the gap between the world of education and the world of work—for example by upgrading vocational and technical education and by forging closer relations between companies and schools. Germany does that and Korea has now introduced “meister” schools; Singapore has boosted technical colleges, and Britain is expanding apprenticeships and trying to improve technical education.
It is hard to be optimistic about a problem that is blighting the lives of so many people. But it is perhaps time to be a bit less pessimistic.
Policymakers know what to do to diminish the problem
- Ignite growth
- Break down cartels
- Build bridges between education and work
Youth Employment Chapter of the UK Parliament’s
Report on Jobs & Livelihoods – 2015
In 2006, the 14 Parliamentary Members of the Intl. Development Committee produced a report on Private Sector Development which criticised DfID for its reliance on investment climate reforms as a means to create jobs: “This is insufficient to reach the groups who are most in need, especially young people. The Department should seek to build partnerships with governments and companies that closely link education with job creation.” In 2014-15, the Committee produced a report on Jobs & Livelihoods and the final chapter was devoted to the issue of youth un- and under-employment. Very few of its recommendations have been implemented to date so, as they are based on field research and evidence sessions with practitioners, they remain very relevant.
World Bank and ILO statistics tell us that 75 million young people are registered unemployed, 620 million are not in training or seeking work and 600 million will enter the job market in the next decade with only 200 million jobs awaiting them. The Zambian Minister of Finance, Alexander Chikwanda, called youth unemployment “a ticking time bomb for all of us.” The UN has stated that ‘large numbers of unemployed youths are a potential source of insecurity given their vulnerability to recruitment into criminal and violent activities.’ It is essential to facilitate dynamic structural change to create jobs for youth. By doing so, the youth bulge can be transformed into a demographic dividend, and the demographic time-bomb can be defused.
Several NGOs told us that one of the major problems for youth job creation is the lack of statistics on the issue. The 2007 World Development Report on Development and the Next Generation stated on its first page, “One of the biggest challenges in writing this Report was that the evidence base was uneven. There were very few rigorous evaluations of youth programmes and policies for any of the issues covered in the Report. The Bank’s inventory of over 750 youth employment interventions found that less than 3% measured for cost-effectiveness and many had no evaluation at all.” Professor Michael Grimm wrote an OECD Evaluation Insight paper “Do We Know how to create Youth Jobs?” and answers: “No. First and foremost, our review underlines how little we actually know about how to create jobs.”
We questioned representatives from youth organisations why so little was known. Andrew Devenport of Youth Business International said: “Youth employment, and the study of youth employment, is a relatively new area, and has only emerged as a focus since the World Bank World Development Report in 2007.” As a result, he believed the field had suffered from a “lack of investment in research and monitoring evaluation” and “poor project design.”
Peace Child International (PCI) said there was a need for longitudinal evaluations, because “interventions made at age 16 or 17 may not bear fruit until young people are 25 or 26.” DFID’s research department could apply to youth the longitudinal kind of evaluations that it had taken up with younger children. PCI recommended that: “Government and institutional economists representing donors and institutions like the World Bank need hard, rigorously-sourced data of the kind that DFID’s research teams are well-placed to provide.”
The problem of youth unemployment is a major priority for most of the countries in which DFID works. On our Committee’s visit to Sierra Leone and Liberia in 2014, both President Ernest Bai Koroma and President Ellen Johnson Sirleaf highlighted youth unemployment as a major concern for them as a potential trigger for the return to civil war. We found that even in these countries where DFID was meant to be working in alignment with national priorities, it was not working on the issue. It had been invited to do so by other donors through the Partner Group on Youth Employment but had declined.
Peace Child International told us that youth did not appear to be a priority in DFID’s thinking. It said that: “Of DFID’s Economic Development Strategy Framework (EDSF) Pillars, only Pillar Five, “ensuring growth is inclusive”, references the young – and then only as one of nine groups. So, while 60 to 70% of the populations of DFID’s target countries are young, they appear as a mere 2.2% of the EDSF focus. Youth unemployment is not mentioned at all.”
PCI recommended that DFID needs to create a position for a senior level youth policy adviser, noting that the UN now had a Special Representative on Youth and the European Commission at DG DEVCO had a youth adviser. It said there was not currently “enough passion and energy at DFID driving the youth employment agenda.”
Potential policy options
Filmer and Fox’s research on Youth Employment in sub Saharan Africa said that 83% of new jobs will be created in household enterprises (family or individually-run micro- enterprises), 9% in government and public services and 8% in formal private sector waged employment.
However, from studying DFID’s Development tracker website, several NGOs told us that current DFID spending is overly-skewed towards formal, private sector, waged employment and the enabling environment – not family or individually-run household enterprises where youth jobs are to emerge.
YBI found: “The majority focus of the five EDSF pillars is on larger-scale, macro interventions that enable growth rather than deliver job creation directly. Certainly a conducive policy, legal, regulatory and institutional environment is central for markets to work and businesses to grow, but DFID also has an important direct programming role to catalyse growth that is not comprehensively addressed in the Framework.”
© Youth Business International’s Youth Job Creation Machine
Both PCI and YBI had clear policy solutions for DFID to help young people to create their own employment through entrepreneurship which required direct support as well as better education in the skills required to prosper in the informal economy. Both urged DFID to consider solutions that could be delivered at scale. As David Robalinho, Senior Policy Advisor in the Solutions4 Youth Employment team at the World Bank said: “The youth employment problem is in the millions but our solutions remain in the thousands….”
Encouraging entrepreneurship through education and skills training for the informal economy
YBI said: “Entrepreneurship is part of the youth employment solution – particularly in developing countries where other job options are less viable and the informal sector makes up a substantial share of the economy.”
DFID puts resources into improving access to primary and junior secondary education. Our experience suggests that there is a failure of school systems. Francis Teal of Oxford University said: “Those most dissatisfied by their job prospects are the newly educated young. There are two possible reasons for this. […] One is that the education is of such low quality that it fails to produce skills of value in the market place. The second is that there is a mismatch between the type of jobs being created and the education supplied.”
PCI would like to see skills for self-employment taught in schools and other community spaces, reporting that: “Education, as it exists in those countries, does not educate for self-employment; it educates for waged employment. When 83% of jobs are not in waged employment, that is self-evidently unwise. There needs to be much more education for enterprise start-ups, […] self-employment and self-reliance.”
Andrew Devenport of YBI gave the example of a type of schooling in Paraguay: “Fundación Paraguaya offers a combination of conventional schooling 50% of the time and 50% of the time focussed on agriculture, producing young graduates who have ability and excitement about being able to make a viable living out of the land.”
We have been particularly disturbed to hear about the high levels of graduate unemployment in developing countries. Our report on Sierra Leone and Liberia highlighted the 70% graduate unemployment rate in Sierra Leone, for which we never discovered a satisfactory explanation. In addition, we were told that the graduates all wanted employment with the government but that these jobs were already all filled with people who were often of poor quality and ineffective but impossible to remove. When we spoke to university students in Dodoma on our Tanzania visit they told us that they did not feel that their university courses were preparing them for life in the working world. They were interested in the idea of sandwich courses where they could spend a year out in industry applying their studies.
Conclusions and recommendations
- We recommend that DFID more explicitly target youth unemployment.
- Currently, donors, the private sector and developing country governments are not working together on a scale to even approach meeting the challenge. The work needs to be scaled up and a sense of urgency injected into the thinking and planning.
- The majority of young people entering the labour market in developing countries will be self-employed or in informal employment. DFID needs to ensure that education in schools teaches the skills young people will need to enter a world of work in which the majority will be self- employed.
- We recommend that DFID officials meet with BIS officials to discuss which of the BIS youth programmes could be transferred to developing countries.
- To ensure it gives greater priority to youth unemployment, we recommend DFID creates the position of a senior adviser on youth employment.
- We encourage DFID to work with organisations proven experience in youth job creation, such as Peace Child International and Youth Business International, to create and pilot innovative ways of collecting and measuring youth job creation data.
- Jobs and livelihoods are such an important issue we recommend that our successor Committee takes it up in the next Parliament to assess what progress has been made.